Cable TV

SNL Kagan says US cable TV will be robust despite decline in video

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MUMBAI: The naysayers have been making a cacophony of sound about the upcoming gradual squeezing out of life of the US cable TV sector. They have been citing the rampant cord-cutting, slimming down of bundles and the explosion in cheaper alternative OTT services as clear indicators that the countdown clock is ticking away.

But long time cable TV bellwether SNL Kagan, a part of S&P Global Market Intelligence says that things are looking cheery enough for US operators. 

A recent report by it indicates that the industry's broadband advantage and bundling stance will enhance revenues from 2016 to 2026. The revised cable forecast incorporates a slightly improved outlook for the video segment and continued upside for the broadband services, which will translate into revenue growth.

Kagan states that residential revenues are projected to increase from $108.38 billion in 2016 to $117.7 billion in 2026, or $9.32 billion over the 10-year interval. Contributions from commercial services will help push total industry revenue from $130.57 billion in 2016 to $140.99 billion in 2016, or $10.42 billion over the 10-year period.

Following are some additional highlights from SNL Kagan's 10-Year Cable Projections:

. Subscriber Growth: Broadband subscriptions are forecast to swell by more than eight  million  over the next 10 years, reaching 71 million, and coming in at more than 1.6x the number of video subscriptions

. Less Dramatic Decline: Basic video subscriptions are projected to drop by an annual compounded growth (CAGR) rate of 1.5% to 45.4 million by 2026, slower than the 1.7% CAGR in last year's 10-year projection

. Cord-Shaving Worries: Mounting anxiety around reduced spending on multi-channel video has been most evident in the advanced services. Combining basic cable and advanced services, SNL Kagan anticipates total revenues generated from residential video services to fall at a CAGR of -0.5% over the next 10 years, totally $55 billion annually in 2026

. Advertising Strength: Despite a decline in net subscribers, net advertising revenue is expected to grow at a 4.3% CAGR through 2026 to reach $6.3 billion

"Like many industries, cable isn't immune to shifting preferences, but continued growth in broadband may propel revenue growth on both the residential and commercial end," said Tony Lenoir and Ian Olgeirson, the SNL Kagan researchers behind the report. "Despite ongoing declines in video, the next 10 years look pretty good for this sector."

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